Analysis of the Cost Structure and Economies of Scale of Broiler Industry (Case Study: Kurdistan Province)

Document Type : Research Article

Authors

M. Haji Rahimi ¹

M. Fahimzadeh ²

M. Nemati ²

R. Meshkat ²

¹ Department of Agricultural Economics, Faculty of Agriculture, University of Kurdistan

² Agricultural Economics Department, Faculty of Agriculture, University of Tehran

https://doi.org/10.22067/jead2.v1391i3.17771

Abstract

Demand for consumption of protein, as a result of improvement in the income and nutrition levels, has a rapid growth in developing countries. Broiler industry has a crucial role in providing protein. To design an optimal plan and to use the potential resources, analyzing cost structure of this industry is required. In this study, cost structure and economies of scale of broiler industry were analyzed using cost function. The data were collected from 68 broiler farms in Kurdistan province, in a simple stochastic random sampling method. Results showed that the cost of broiler feed had the largest proportion of product expenditure. Demand for all inputs was inelastic. Estimation of the economies of scale measure, showed increasing returns to scale; supporting development of the larger size of broiler farms for future in Kurdistan province. As a large proportion of the expenditure was to import products, to develop the industrial sector a priority should be given for producing food in the province.

Keywords

Cost function

Economies of scale

Broiler

Kurdistan province

20.1001.1.20084722.1391.26.3.2.3

---